Optimism abounds as Eastern Africa’s Economic Recovery Gathers pace

ADDIS ABABA – Optimism abounds as the economy of East Africa sub, which shrunk for the first time in a decade last year, is projected to expand by 3 percent in 2021.

This was revealed during the 25th session of the Intergovernmental Committee of Senior Officials and Experts organised by the UN Economic Commission for Africa.

The meeting, attended by 100 decision-makers and experts, discussed how countries in the sub-region should strengthen resilience for a strong recovery and how to attract investments to foster economic diversification and long-term growth.

Speaking at the meeting, Vera Songwe, the Executive Secretary of the UNECA, stressed how in 2020, the economy of Eastern Africa shrunk for the first time in decades.

She said that the agricultural sector was not spared, facing weather-related shocks and the biggest desert locust invasion in 70 years.

“The region lost millions of jobs” she noted.

Songwe emphasized her optimism, saying that early projections suggest that the region’s economy will expand by 3% this year, with certain economies such as Djibouti, Eritrea, Rwanda and Uganda rebounding by over 4%.

She also noted the progress that had been made towards ratification of the African Continental Free Trade Area (AfCFTA) and affirmed ECA’s continued support to the implementation of national strategies.

Uzziel Ndagijimana, Minister of Finance and Economic Planning of Rwanda, highlighted how the regional economies had proven to be resilient with Africa recording the least economic contraction globally in 2020 at -1.7%.

Ndagijimana appealed for all countries to harness the advantages of the AfCFTA and to create a conducive business environment by adopting business-friendly approaches and easing bureaucratic processes regionally.

Participants at the meeting also discussed a detailed comparative analysis of the macroeconomic situation in East Africa taking stock of the impact of the pandemic from both an economic and social perspective.

Andrew Mold, Chief of the Regional Integration and AfCFTA cluster at ECA in Eastern Africa, presented the overview of the Macroeconomic and Social Developments report in East Africa in 2020/21.

The report noted that Eastern Africa was estimated to have lost the equivalent of 18 million jobs lost in the second quarter of 2020 alone, as per ILO’s report for the 2021.

Several countries adopted fiscal packages in response to the crisis, notably to support incomes and businesses. But the scale of the stimulus packages is insufficient to replace the jobs lost in the region.

Mold urged governments to accelerate the roll-out of COVID-19 vaccinations; extend emergency support measures; maintain crucial infrastructure projects; accelerate digitization; accelerate AfCFTA implementation and align health services with regional priorities.

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